Sports sponsors trade up

David Armstrong, OF THE EXAMINER STAFF

Published 4:00 am, Sunday, November 16, 1997

Major players in the financial-services business, intent on promoting brand awareness, are taking the field with a revised marketing game plan. The new wrinkle: Becoming high-profile sponsors of high-end sports such as golf and skiing.

No longer content simply to buy advertising, corporations like Charles Schwab Co. are forging marketing partnerships with teams and tours. The financial services company offers in-kind money management help to athletes and staff, showcases jocks in its advertising and, in return, publicly links its brand with the stars and their sports.

The message to consumers: You may not be sinking a putt at Pebble Beach or zooming down the slopes at Nagano, but we can do for you just what we do for these attractive overachievers in sports gear.

Sports sponsorship of one kind or another is common, of course. Witness 3Com Park (nee Candlestick), the Nike golf tour, the swarm of "official" sponsors for the U.S. Olympic team, even college football's Poulan Weedeater Bowl.

What is changing is the increasing intensity and specificity of niche sports marketing, especially by the superstars of Wall Street and Montgomery Street.

In January, for example, the San Francisco-based brokerage house Charles Schwab Co. signed a three-year agreement to sponsor the PGA Tour. The tour has a bevy of sponsors from other fields, including Coca-Cola, IBM and

AT&T.

Then, last month, Schwab signed on as "official investment firm" for the U.S. Olympic ski team, setting up 401(k) plans and internships in its branch offices for the 17 team members.

The same is true of Schwab's deal with the PGA Tour, which, Hubbard says, allows Schwab to link its brand with "the burgeoning popularity of golf." Like skiing, golf is popular among upscale consumers with enough disposable income to be desirable investors.

According to Brian Murphy, publisher of Sports Marketing Letter, "It's not unusual for corporate sponsors to offer in-kind services. An airline might offer discounted or even free airfare" to athletes.

Moreover, Murphy points out that credit card companies - Visa is a prominent example - are active sports sponsors. But, he adds, "It's rare that a company can offer what Schwab has in terms of a range of financial services. They've taken an old idea and put a new gloss on it."

Schwab is not the only financial services company to embrace sports sponsorship, but it does appear to have made a broader and more active commitment than its competitors.

Although Dean Witter sponsors the Jack Nicklaus Memorial Open golf tournament, spokesman Jim Fusco says his company is not widely active in sports sponsorship.

For several years, Merrill Lynch sponsored a popular individual event, the "Merrill Lynch Shoot-Out," telecast every Tuesday during the official January through October PGA Tour season. But the giant New York house dropped the event last year, and Schwab jumped in as the entire tour's first full-blown financial services sponsor.

Spokeswoman Bobbie Collins says Merrill Lynch used the shoot-out primarily to entertain clients on-site.. It has no sports sponsorships at present, but Collins noted that Merrill Lynch has been an Olympic Games sponsor in the past.

At PGA Tour headquarters in Florida, vice president for marketing Tom Wade said that Schwab's transition from discount brokerage to "top-tier, full-service financial services institution" made it attractive to the PGA Tour. Schwab paid an unspecified amount of cash to become a sponsor and highlights the PGA Tour in TV advertising, Wade says.

The Schwab deal, according to PGA Tour treasurer Andrea King, provides more customized service to 120 pro golfers and 700 PGA Tour employees than did previous plans, which the organization managed itself. The new package includes retirement planning, and says King, offers

"much greater diversification opportunity" and

"tremendous value on a real-time basis."

Local Schwab representatives also visited 18 of 40 tour stops this year, providing on-line access to fans attending tour events who wanted to obtain quotes on their stocks, check their accounts or get Schwab- and PGA Tour-branded giveaway items.

Schwab executive Dan Gimbel visits most stops on the PGA Tour, where top golfers can win serious prize money to go with bragging rights at the 19th hole. This year, tour leader Tiger Woods pulled down a cool $2 million in tour earnings, though he earned tens of millions more from non-tour matches and product endorsements.

Bill Bentley, director of the golf division for Advantage Worldwide, a sports marketing and management company, says that top pro athletes already have personal managers, plus financial planners, to invest their winnings. Advantage International, which employs player agents, consultants and event planners, and which has clients like tennis star Steffi Graf, offers financial advice to clients who seek it.

And the players - often young, affluent, inexperienced in the business world - need advice from someone.

Peter Tatum, vice president of the Western Region for International Management Group, says, "These young men and women are moving large sums of money. Many have dropped out of college before turning pro. When they retire at - what, 35? - you'd hope they would have worked out their money management, but a lot of them don't."

IMG, with 78 offices in 38 countries, has a stellar client list that includes retired gridiron god Joe Montana and Wayne Gretzky, the hockey legend.

Schwab's Hubbard acknowledges that "many PGA players have chosen to retain their relationships with financial managers and other brokerage firms," but "a number of these players are taking a look at us." Schwab has $28 million in player assets under management.

That is a tiny slice of the $345 billion in assets that Schwab manages, but Oakland-based marketing and communications consultant Joel Drucker says that linking itself to the links "allows Schwab to grab the halo effect from golf," referring to golf's new multicultural image in the Age of Tiger.

Golf has surged in popularity since the 1980s, when aging Baby Boomers started puttering around the fairways in motorized carts instead of pumping iron or jogging. Moreover, as Drucker observes, golf's leisurely pace makes it a great way for businesspeople "to get face-time and a nice way to spend time in nature."

National Golf Foundation spokeswoman Judy Thompson says there were 24.7 million duffers in America in 1996, up from 19.9 million in 1986. In that same span, the number of U.S. golf courses jumped from just over 13,000 to nearly 16,000.

Along with extra golf balls, those divot diggers have cash in their pockets. According to Thompson, the average U.S. household income for golfers is $60,000 a year.

Drucker sounds a cautionary note by pointing out that the PGA Tour, despite its star quality, and the U.S. Ski Team, despite its aura of striving idealism, "are small structures. I don't know if you could have Dean Witter do that (run organization-wide financial services) for the National Football League. It becomes an awkward thing to implement.'

Maybe, but Hubbard says the public relations value is huge. Schwab features golf stars Mark O'Meara, Jeff Maggert and Steve Elkington in widely watched television ads. According to the PGA Tour, its TV ratings have soared by 20 percent over 1996.

The amateur ski team can't match pro golf's star power, but that's OK. Hubbard maintains that "the demographics of skiing and golf are a little younger, active and affluent" than the sporting average, and match up well with Schwab's target market. "Our customer base tends to be a little younger."

By providing services to the national ski team members - among them rising stars such as Picabo Street - Hubbard says, "We're delivering a functional sponsorship. They're dealing with life after they put the skis away."

Tom Kelly, vice president for public relations of the Park City, Utah-based U.S. Ski and Snowboard Association, says of skiing, "We are a pretty active and aggressive sport in putting together sponsorships."

The USSSA, Kelly says, has had a relationship with Visa International since 1986. Another sponsor, People's Bank of Connecticut, offers "various affinity-ties to us. Card users can get points for skiing opportunities."

There's more to it than discounts, according to Kelly.

"Career planning for athletes is really important to us," he says. "Schwab has been a good company to deal with that."

Schwab's internship program, Kelly says, "has been pretty well-received, but it's pretty new. A few have expressed interest, and over time there'll be a lot more." One problem is time. "There's not a lot of off-time for these athletes." &lt;